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On 16 November 2016 the Sejm (lower chamber of the Parliament) adopted a bill to amend the VAT Act and certain other statutory laws, calling for numerous changes in the VAT Act and the Criminal Fiscal Code, among other laws.

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Since then, the relevant sub-committee of the Civil Procedure Rule Committee (“CPRC”) has considered the responses to the first consultation and taken them into account in preparing a second draft of the Protocol.

Aims of Protocol

The main aim of the Protocol is to provide debtors with sufficient information to enable them to obtain advice on their position before the issue of a claim. The initial proposal provided a new requirement allowing the debtor 28 days to seek debt advice (para 4.3) and the requirement to consider ADR (section 6). Back in September 2014, creditors objected to a proposed requirement that details of the contract and full statements of account should be included in every letter of claim, even though many were not defended.

Proposed Changes and a Second Consultation

In response to the concerns raised by the first consultation, the Protocol has been restructured to reduce the amount od documentation that creditors will be required to provide to debtors in all cases at the pre-action state. A two-stage approach has now been adopted whereby some information will be provided to debtors as of right, with/in a Letter of Claim, with other information and documents being available on request. Debtors will also be prompted to consider what additional information they might wish to ask for.

Debtors will also be provided with an Information Sheet which is designed to set out in plain English their rights and obligations under the Protocol. This is intended to address concerns which were raised during the consultation that

providing debtors with a copy of the full Protocol would be overly costly for creditors and

the Protocol was drafted in language that debtors were unlikely to engage with or understand.

Debtors will now be given 30 days in which to response to the creditor and provide completed Reply Form (para 4.3)

There is also a “taking stock” requirement set out at paragraph 8 of the Protocol whereby if the
procedure set out in the Protocol has not resolved the dispute between the debtor and the creditor, the parties should undertake a review of their respective positions to see if proceedings can be avoided, or at the very least, to try and narrow the issues between them.
In all other respects, the MoJ confirms that the Protocol has been generally simplified and clarified in response to comments received during the first consultation and following detailed discussion as to the desirability and proportionality of all provisions by the https://www.gov.uk/government/organisations/civil-procedure-rules-committee

Given the degree of interest in the previous consultation, the CPRC has decided to carry out a further consultation on the Protocol over an eight week period. The CPRC has invited written responses in relation to a number of specific points, including whether the two-stage approach strikes the right balance between fairness and proportionality, whether any other information should be provided to debtors as of right or in with the Letter of Claim and whether the Information Sheet to be sent to the debtor is sufficiently clear as it is currently drafted.

Written submissions should be sent to Jane Wright, Post Point 3.32, Ministry of Justice, 102 Petty France London SW1H 9AJ, or to mailto:paps_consultations@justice.gsi.gov.uk. Please note “Debt Protocol Consultation” in the subject line of your email and responses should be received no later than 5pm Monday 11 January 2016.

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